MCQs For NCERT Class 11 Business Studies Chapter 2 Forms of Business Organisation

Please refer to the MCQ Questions for Class 11 Business Studies Chapter 2 Forms of Business Organisation with Answers. The following Forms of Business Organisation Class 11 Business Studies MCQ Questions have been designed based on the latest syllabus and examination pattern for Class 11. Our experts have designed MCQ Questions for Class 11 Business Studies with Answers for all chapters in your NCERT Class 11 Business Studies book.

Forms of Business Organisation Class 11 MCQ Questions with Answers

See below Forms of Business Organisation Class 11 Business Studies MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question. At least 10 adults, no maximum limit in case of ________   
(a) Joint Hindu Family
(b) Cooperative Society
(c) Company
(d) Partnership

Question. Aman wants to start a business which requires good managerial skills. Which type of business organisation do you think Aman should form:   
(a) Sole proprietorship
(b) Company
(c) Joint Hindu Family business
(d) Cooperative society

Question. As per The Companies Act, 2013, a public company is defined as:     
(a) A company which is not a private company
(b) A company which has restrictions on the transferability of its shares
(c) A company which is prohibited from issuing shares to the public
(d) A company which has limited the number of its members upto 200

Question. The partners of a partnership firm have unlimited liability, this means that:   
(a) Partner’s personal assets cannot be used for repaying the firm’s debt
(b) Partner’s personal assets can be used to repay the firm’s debt/liability
(c) Partners will enjoy unlimited profits
(d) Profit is distributed according to the amount of their capital contribution.

Question. The major advantage of a franchise is:   
(a) training and management assistance.
(b) personal ownership.
(c) nationally recognized name.
(d) all of the above.

Question. Which of these is a limitation of the Joint Hindu Family business:   
(a) Unlimited liability of all the members
(b) Limited managerial skills
(c) Delay in decision making
(d) Lack of public confidence

Question. In case of ___________ Registration is compulsory   
(a) Sole Proprietorship
(b) Partnership
(c) None of these
(d) Company

Question. _______ type of partner have unlimited liability:     
(a) Active
(b) Sleeping
(c) Nominal
(d) All

Question. Every partner is both an agent and a principal. Identify the characteristic of partnership being referred here.   
(a) Mutual Agency
(b) Risk Bearing
(c) Membership
(d) Formation

Question. The main disadvantage of a general partnership is:   
(a) the unlimited liability of the partners.
(b) disagreement amongst partners.
(c) shared management.
(d) difficulty of termination.

Question. Harish was a sole proprietor and was running a retail shop of gift items. Unfortunately, due to an accident Harish died, due to which his business also came to an end. Which feature of the sole proprietorship is applied here:     
(a) No separate entity
(b) Lack of business continuity
(c) Sole risk bearer and profit recipient
(d) None of these

Question. Which of the organisation has a feature of separate legal entity from its members:     
(a) Company
(b) Cooperative society
(c) Sole proprietorship
(d) Both A and B

Question. Minimum number of directors required in a public company is____and in a private company is_____:   
(a) 7; 2
(b) 3; 2
(c) 1; 1
(d) 10; 5

Question. Possibility of conflicts is a limitation of which type of business organisation:   
(a) Sole proprietorship
(b) Partnership
(c) Company
(d) Joint Hindu Family business

Question. Why does the cooperative societies has a merit of government support:   
(a) Because these societies exemplifies the idea of democracy
(b) Because these societies are formed for the welfare of the members
(c) Because these societies help in the development of the country
(d) Because government wants to increase the number of such societies

Question. Profits do not have to be shared. This statement refers to     
(a) Company
(b) Sole proprietorship
(c) Joint Hindu family business
(d) Partnership

Question. Which of the following is not mentioned in the partnership deed:   
(a) Name of the firm
(b) Duration of business
(c) Method of solving disputes
(d) Amount of profit and losses

Question.A company is created by ______ and only ______ can bring an end to its life:   
(a) Law; law
(b) Promoters; law
(c) Shareholders; promoters
(d) Directors; promoters

Question.. ________is formed to protect the welfare of farmers:   
(a) Producers cooperative society
(b) Consumers cooperative society
(c) Farmers cooperative society
(d) Marketing cooperative society

Question. Co-operatives play an important role in:   
(a) aerospace.
(b) agriculture.
(c) manufacturing.
(d) all of the above.

Question. Who undertakes the management & control of the affairs of the company on behalf of its owners?
(a) Board of Directors
(b) Departmental Heads
(c) Managing Directors
(d) Vice president

Question. Application for approval of name of a company is to be made to.
(a) SEBI
(b) Registrar of Companies
(c) Government of India
(d) State Government

Question. Minimum number to form any Private company is
(a) 7
(b) 5
(c) 2
(d)10 

Question. The minimum number of members required to form a cooperative society is.
(a) Five
(b) Ten
(c) Twenty
(d) Two

Question. The directors take all decisions on behalf of the shareholders, keeping in mind their own benefit. Identify the demerit stated above.
(a) Delay in decision making
(b) numerous regulations
(c) Lack of secrecy
(d) oligarchic management

Question. Minimum members to form a public co.is
(a) 2
(b) 7
(c) 50
(d) 1

Question. Which is not a feature of sole proprietorship.
(a) Unlimited liability
(c) limited managerial ability
(b) Ease of formation
(d) Quick decision making

Question. The oldest form of business organization of India
(a) HUF business
(b) partnership
(c) public co.
(d) Sole proprietorship

Question. The Act which governs the formation of a partnership business is Indian Partnership Act. 
(a) 1932
(b) 1956
(c) 1949
(d) 1912

Question. What is the size of minimum subscription as per SEBI?
(a) 90%
(b) 92%
(c) 85%
(d) 80%

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) 
(b) Both Assertion (Aland Reason(R) are true, but Reason (R) is not the correct explanation of Assertion (A) 
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true 

Question. Assertion (A) Board of directors exercise direct control over the business.     
Reason (R) Board of directors are the owners of the company. 

Question. Assertion (A) Personal assets of the partners may be used to pay-off business debts in case of insufficiency of business assets.     
Reason (R) Partners of a firm have unlimited liability. 

Question. Assertion (A) Credit cooperative societies are established for providing easy credit on reasonable terms to the members.     
Reason (R) Credit cooperative societies provide loans to members out of the amounts collected as capital and deposits from the members and charge low rates of interest.

Fill in the Blanks:

Question. MOA is also known as __________ of the co.

Question. The capital of a cooperative society is raised from its __________ through issue of shares.

Question. Partners share profit and lose in an __________ ratio. 

Question. Private Ltd. Company can start business after completion of _______ stage.

Question. The liability of members of a cooperative society is __________ to the extent of their capital contribution.

Question. The __________ of a cooperative society is voluntary.

Question. Minimum ________ number of members can start private company. 

Question. The liability of a company is limited to the extent of the amount ___________ on the shares held by them. 

Question. The cooperative society lays emphasis on __________ motive.

Question. The regulatory body, which is set up for the protection of investors is __________ . 

True or False:

Question. Before commencing business, it is necessary to receive minimum subscription in Public Company.

Question. A company inviting funds from general public must conceal any material information from potential investors.

Question. On the basis of liability partnership is classified into general partnership and limited partnership.

Question. Mitakashara system prevails all over India and allow only male member to be co.parceners in the business.

Question. A co.is legally entitled to undertake an activity which is beyond the object clause.

Question. In a cooperative society each member is entitled to equal voting rights.

Question. General public is having greater confidence in partnership business.

Question. The written agreement made by the partners is called partnership deed.

Question. A nominal partner is one who allows the use his/her name by a firm, but does not contribute capital.

Question. Farmer?s cooperative society is set up to help people to construct houses at reasonable cost.

Match the following:

Question. Match the following column with no. of members

(a) A public co. can start with Minimum no.	1. 2
(b) A pvt.co. can start with Minimum no.of members	2. 1
(c) A one person co. can be Start with minimum member	3. 7

Question. identify no. of directors require in a co.

(a) public co.	1. 3
(b) private co.	2. 2
	3. 5

Question. Identify with main content of MOA

(a) registered office of the co.	1. name clause
(b) main object of the co.	2. domicile
(c) approved name of the co.	3. object clause
(d) up to unpaid amount of the co.	4. liability Clause
	5. authorised capital of the co.

Question. Identify the correct term of documents

(a) An invitation to public	1. MOA
(b) birth certificate of a co.	2. prospectus
(c) charter of the co.	3. Incorporation
	4. articles of association.

One word Answer type Questions :

Question. Name the cooperative society set up for providing easy credit on reasonable terms to the members.
Answer. Credit cooperative society.

Question. When is a business idea said to be economically feasible? 
Answer. When its chances of earning profits are high.

Question. Name the State in which Mitakashara system is not adhered. 
Answer. West Bengal.

Question. Name the document which invites the general public to subscribe to the shares and debentures of the company. 
Answer. Prospectus.

Question. “Wadhwa Brothers is a firm formed for the construction of a shopping mall.” Identify this type of partnership. 
Answer. Particular partnership.

Question. How many members must be there in a joint family to carry on Joint Hindu Family Business? 
Answer. Minimum two members.

Question. Name the type of partner who contributes capital and shares profits/losses but does not take part in the day-to-day management of the firm. 
Answer. Sleeping or dormant partner.

Question. Name any two types of partners who neither contribute capial nor share profits or losses. 
Answer. (a) Nominal partner. (b) Partner by estoppel.

Question. “In spite of not being a partner, he becomes liable to third parties for the repayment of the firm’s debts.” By what name such a person is known? 
Answer. Nominal partner.

Question. Which form of business is suitable for a tailoring shop? 
Answer. Sole proprietorship because personal attention is required.

Question. Which business organisation is most advantageous on the basis of availability of capital? 
Answer. Company.

Question. What will be the adverse impact on the partners of a firm if a partnership firm is not registered? 
Answer. The partners cannot file a suit against the firm or any other partner.

Question. Name the type of partnership whose existence depends on the will of the partners. 
Answer. Partnership at will.

Question. What is ‘Plant Layout’? 
Answer. It means the physical arrangement of machines and equipments needed to manufacture a product.

Question. Which form of business organisation has the main objective of rendering service to its memberspartnership firm or cooperative society? 
Answer. Cooperative society.

Question. List any two businesses where sole proprietorship would be suitable form of business.
Answer. (a) Beauty parlour. (b) Grocery store.